Thursday, August 12, 2010

These positions will execute first thing in the morning, I am looking to sell off some inventory on the long side, looking at stocks whose charts are at risk and with a gap down open on the index will do some damage. The only question is when the cursory oversold bounce happens will these charts regain support - I don't know of course, but bigger picture I want to get to a more hedged portfolio (we still hold hordes of cash of course). I'll marry these with some modest short positions in TNA/BGU - I hate chasing things that are down so much in the past 30 hours, hence I expect to get whipsawed on these. I am not so concerned about making any big kills on the short side today - basically I want to get the portfolio readjusted, and if this is the beginning of an intermediate term correction we'll have plenty of time to make money on the downside.

All that said, the closer we get to S&P 1010, I'll be willing to buy some of these names that we sold off almost our entire position during this rally, and currently only have a holding stake of 0.1%. I have about 4-5 names of that ilk.

I created a basket of commodity exposure with 4 stocks, 0.5% into each to create a 2% position last week - I am going to sell the weakest 2 of the 4 today, so effectively this will drop from a 2% position to a 1% position. Freeport McMoran Copper & Gold (FCX) and Walter Industries (WLT) [coal] are the weaker 2; both will be closed.

Monsanto (MON) missed my target price of $64ish to sell by about $2; unfortunate - I got a bit greedy and rather than cull modest profits as usual, tried to go for a bigger score. I am going to cut this position by half immediately at the open and then re-assess. Below $55ish, the chart turns poor and I might be completely out soon. EDIT 9:40 AM - Monsanto is actually up over 1% this morning; lucky me.

Rovi (ROVI) looks like it has run out of steam, so I am going to cut it back by 1/3rd. It also may have formed a double top at $45 which would be bearish. If it falls below $41 and stays there, I might be done with the position, but for now just cutting back.

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